New Jersey Appellate Division Adopts 'Cat's Paw' Theory of Discrimination and Also Expands 'Single Comment' Hostile Environment Claims

This post was written by Don A. Innamorato and John T. McDonald.

In a typical harassment/discrimination claim, a plaintiff alleges that inappropriate or discriminatory conduct rendered his or her work environment hostile and, in many cases, that he or she also suffered an adverse employment action (e.g., discharge) caused by the discriminatory workplace. For many years, employers were often successful in obtaining the dismissal of such claims where it could be shown that, at the time of the adverse employment action, the decision-maker had no knowledge of the plaintiff’s protected class or the hostile environment. In essence, the decision-maker could not possibly have discriminated on the basis of something of which he or she was never aware. Hostile work environment claims based solely on a single alleged comment were also prone to dismissal. In a recent case, however, the New Jersey Appellate Division drew upon new federal decisions to change the legal landscape for employers. This change is expected to make it easier for plaintiffs to avoid pretrial dismissal of their suits, and to present their discrimination and harassment claims to a jury.

In an unpublished decision, Kwiatkowski v. Merrill Lynch, the New Jersey Appellate Division adopted the “subordinate bias” theory that several federal courts have applied in Title VII cases when reviewing the dismissal of a discrimination claim. Often described as the “cat’s paw” or “rubber stamp” theory of liability, the subordinate bias theory holds that an employer may be found liable for a facially nondiscriminatory employment action if the decision-maker may have been influenced—even unknowingly—by a biased subordinate employee. In such a case, the biased subordinate provides an illegal taint to the decision-maker’s action by selectively reporting, or even fabricating, information in his communications with her. Thus, the employer can still be held liable even though the decision-maker herself was unbiased, or not even aware that the plaintiff was in a protected class, or had previously complained of discrimination or harassment. In the Kwiatkowski case, the Appellate Division reversed an award of summary judgment to the employer, based upon the federal decisions applying the “subordinate bias” theory.

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The Employee Free Choice Act: The Crown Jewel of Organized Labor's Legislative Agenda

In perhaps no U.S. presidential election in recent memory has the outcome been more important to a change in our basic labor law, the National Labor Relations Act (“NLRA” or “Act”). Predictions are that if Sen. Obama is elected President and the Democrats take control of Congress, the crown jewel in labor’s legislative agenda, the Employee Free Choice Act, which passed the House last year but fell short in the Senate,1 could become the law of the land.2

The Employee Free Choice Act (“EFCA”), as passed by the U.S. House of Representatives, has three major features that make sweeping changes in the current provisions of the NLRA. First, the Act will permit unions to obtain certification through a mandatory card check conducted by Regional Offices of the National Labor Relations Board (“NLRB” or “Board”). Second, EFCA will impose first contracts through interest arbitration where the parties are unable to agree on the terms of such agreements. Third, EFCA will amend certain provisions of the Act to permit NLRB Regional Directors, acting at their own discretion, to seek injunctive relief against employers for alleged violations arising out of union organizing campaigns. The Board will be required to assess both back pay and double liquidated damages on employers who discharge employees during an organizing campaign. In addition, the Board will have authority to assess a civil penalty of up to $20,000 per violation of Section 8(a)(1) or (3) of the Act that substantially interferes with the union organizational process during the period of organizing and, after certification or recognition of a union, until a first contract is entered into. Each of these changes and its significance is examined below.

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U.S. Supreme Court Faces Variety of Employment Issues

The U.S. Supreme Court begins its 2008-09 term with several cases related to labor and employment, raising issues that include the protection afforded employees who participate in sexual harassment investigations, management’s right to require union employees to arbitrate discrimination claims rather than raise them in court, and whether employers calculating pension benefits must credit employees for the time they missed work for pregnancy leaves taken before pregnancy discrimination was outlawed. These cases are summarized below.

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